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Reproduced with permission from Suomalainen Lakimiesten Yhdistys: - Tidskrift utgiven av Juridiska Föreningen i Finland [Finnish Law Society] 126 (1990) 327-343

excerpt from

Obligations of the Buyer under the Vienna Convention on the International Sale of Goods [*]

Leif Sevón, Director General, jur.lic.

(. . .)

Under Article 57, if the buyer is not bound to pay the price at any other particular place, he must pay it to the seller at the seller's place of business. If payment is to be made against the handing over of the goods or of documents, the buyer must pay the price at the place where the handing over takes place.

The rule set out in Article 57 applies only if the buyer is not bound to pay the price at any particular place. An obligation of the kind envisaged in the provision can follow from the contract or from previous dealings between the parties. According to Article 54 the obligation to pay the price includes, i.a., taking such steps as may be required under the contract to enable payment to be made. The place where such measures shall be taken may often be agreed upon, e.g. by a reference to a trade term. Such an agreement may thus extend only to parts of the obligation to pay the price. It is not necessary that this obligation in toto is to be performed at one single place.

The relevant passage of the provision only speaks of the situation where the buyer is bound to pay at a particular place. This would seem to have a bearing on a clause in the seller's invoice stating that payment is to be made to the seller's account in a certain bank. If such a clause is not based on the contract it may be interpreted as a statement by the seller that he will accept payment to have been adequately made if made in time to that account. It is clear that the seller cannot unilaterally impose on the buyer an obligation to make payment in such a manner. Article 57 is thus applicable irrespective of such a clause in the invoice.

Under Article 57, the buyer has to bear the costs and the risk for the transfer of an amount corresponding to the price to the seller's place of business at the time of conclusion of the contract. If the seller [page 333] has more than one place of business, the relevant place of business according to Article 10 is the one which has the closest relationship with the contract and its performance, not only in regard to payment of the price. The uncertainty inherent in this provision is unlikely to cause problems in practice as the place of payment is often stated in the contract or in an invoice enabling the buyer to make payment in accordance with that clause. In spite of such a reference, the buyer may pay the price at the seller's place of business which has the closest relationship with the contract.

In conjunction with Article 58, Article 57 states that if there is a delay in the transfer of the amount to the place where payment is to be made, e.g. due to lack of the authorization of transfer by the appropriate authorities or to a mistake by the buyer's bank, having the effect that the amount is not available at the place of payment in time, there is a breach of contract on part of the buyer.

Under Article 57(2) the seller must bear any increase in expenses incidental to payment which is caused by a change in his place of business subsequent to the conclusion of the contract. The provision only deals with the distribution of costs. The fact that there is a change in the sellers's relevant place of business does not seem to alter the buyer's obligation to pay the price at the right moment at the new place of business. If this is the case, the question arises, but remains unanswered in the Convention, whether a delay in payment caused by late information by the seller of the new place of payment is to be considered a breach of contract by the buyer and whether that would also be the case if the buyer could offer payment at the seller's original place of business in time. It would seem that the answer may be negative in both cases in view of the provision in Article 79(1).

Article 57(1)(b) deals with the place of payment when payment is to be made against the handing over of the goods or of documents. If the contract provides that payment is to be made against a bill of lading or on CAD or COD terms, the provision settles the problem of errors or delay in transmission of the payment. If the documents are to be tendered at the seller's place of business, there is a delay in payment if payment is not made when the documents are presented in accordance with the contract. If there is a delay or an error in the transmission of the amount to the seller from the place where the [page 334] buyer has paid upon presentation of the documents, this is no longer any concern of the buyer.

The provision on the place of payment seems to have caused problems in some jurisdictions because under national law a party may be entitled to bring suit at the place where payment is to be made. However, this result does not follow from the Convention. During the Vienna Conference an attempt was made to clarify that the Convention did not settle the question of jurisdiction and that it was thought inappropriate to solve this problem in the Convention. If the result is deemed inappropriate, it can be altered by amending national law.[page 335]

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Pace Law School Institute of International Commercial Law - Last updated January 27, 2000
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